Modern Mining May 2021

MINING News

DRDGOLD Limi ted (DRDGOLD; JSE, NYSE:DRD), has issued an operating update for the quarter ended March 31, 2021, reporting a 6% quarter on quarter reduction in gold produced to 1 382 kg. This is despite a 3% increase in ore milled. Yield was 9% down to 0,190 g/t, compared to 0,208 g/t in the previous quarter, and the volume of gold sold was Lower gold price, production hit DRDGOLD’s quarterly earnings down by 8% to 1 363 kg. This led to a 3% increase in the cash operating cost per kilogram of gold sold, to R549 817/kg, compared to 532 480/kg in the previous quarter. The cash operat- ing cost per ton of material processed decreased by 6% to R102/t. All-in sustaining costs per kilogram were R645 488/kg and all-in costs per kilogram

were R654 072/kg, reflecting a quarter- on-quarter increase, which is mostly attributed to an increase in sustaining capi- tal expenditure. The 8% decrease in gold sold and 9% decrease in the average rand gold price received of R857 895/kg, contributed to an adjusted EBITDA of R371,7-million, which was down 35% from the previous quarter. Cash and cash equiv-

a l en t s de c r ea s ed b y R3,7-million to R2 165,7-mil- lion as at 31 March 2021 after the interim dividend of R341,8-million was paid for the six months ended 31 December 2020. The compan y a l s o reports that its extended capital expenditure pro- g r amme f o r t he yea r ending 30 June 2021 will be the main beneficiary of cash generated in the quarter in review. Even with this planned capital expenditure, and unless an unforeseen event takes place, the Company antici- pates declar ing a f inal dividend in August 2021, to maintain its 14-year unbro- ken run of dividends paid. 

DRDGOLD has reported a 6% quarter on quarter reduction in gold produced to 1 382 kg.

Global iron ore production to recover by 5,1% in 2021

expected to produce between 1 and 2 Mt. The company has retained its guidance for Australian mines at 276 – 286 Mt on a 100% basis, due to scheduled mainte- nance work at its ore handling plant and tie-in activity at the Area C mine and South- Flank mine. Bajaj continues: “The remaining com- panies are expected to produce more than 600 Mt of iron ore, including FMG, whose production is expected to range between 175 and 180 Mt supported by its Eliwana mine that commenced opera- tions in late December 2020, and Anglo American, which is expecting to produce between 64 and 67 Mt. Vale is expected to resume 40 Mt of its production capac- ity, taking its overall production capacity to 350 Mt in 2021, with production guid- ance of 315 – 335 Mt.” 

Global iron ore production fell by 3% to 2,2-billion tonnes in 2020. Global produc- tion is expected to grow at a compound annual growth rate (CAGR) of 3,7% to 2 663,4-million tonnes between 2021 to 2025. The key contributors to this grow will be Brazil (6,2%), South Africa (4,1%), Australia (3,2%) and India (2,9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company. Vinneth Bajaj, associate project man- ager at GlobalData, comments: “Declines from Brazil and India were major con- tributors to the reduced output in 2020. Combined production from these two

countries fell from a collective 638,2 Mt in 2019 to an estimated 591,1 Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auc- tioning of mines in Odisha affected India’s output in 2020. “Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian gov- ernment, while a speedy recovery in China led to a significant 10,4% increase in the country’s iron ore output.” Looking ahead, the global iron ore pro- duction is expected to increase by 111,3 Mt to 2 302,5 Mt in 2021. Rio Tinto is expected to produce up to 340 Mt of iron ore, while BHP has released production guidance of 245 – 255 Mt, supported by the start of the Samarco project in December, which is

6  MODERN MINING  May 2021